In April 2025, Washington D.C. recorded a significant increase in medical cannabis sales, reaching $5.46 million. This spike generated approximately $327,000 in tax revenue, marking a 90% rise compared to the same month in 2024. Despite the surge in sales, cannabis tax revenue still represents a minor fraction of D.C.’s overall revenue. The current sales tax rate for cannabis is set at 6%, notably lower than the 15% tax on hotels and the 10% tax on alcohol and entertainment.
Cannabis businesses in D.C. face considerable financial challenges, including high licensing fees and various local and federal taxes, such as IRS Section 280E, which complicates their tax situations. Last year, the city collected around $2.2 million in cannabis sales tax, but the funds are not allocated specifically for community reinvestment at this time.
Starting in Fiscal Year 2027, cannabis tax revenue is slated to be redirected from the Healthy D.C. & Health Care Expansion Fund to the Medical Cannabis Social Equity Fund, as per the 2022 Medical Cannabis Amendment Act. This fund aims to support communities that have historically been impacted by stringent cannabis enforcement laws. However, discussions have emerged regarding the fund’s viability following Mayor Bowser’s proposal to decrease its budget by $6.5 million for Fiscal Year 2025.
Additionally, a planned cannabis sales tax holiday for two weeks in April 2025 was not enacted due to reported funding constraints, raising concerns about the long-term sustainability of the equity fund. As the landscape of cannabis regulation continues to evolve in D.C., the implications for both revenue generation and community support remain a topic of significant debate.
English 
Spanish 
German 
Czech